Home prices down from last quarter and softening will continue

Royal LePage report shows that gains made in early 2022 will be lost as the Canadian housing market continues to soften

Home prices down from last quarter and softening will continue
Steve Randall

Canadian home prices continue to ease as tougher conditions weigh on would-be homebuyers.

However, despite a quarterly decline of almost 5% in the third quarter, following a negative second quarter, the aggregate price of a home in Canada remains more than 3% higher than a year earlier at $774,900.

The stats are from the Royal LePage House Price Survey released today (Oct. 13) which shows that Q1 gains in prices will be lost in the continuing softening of the market (end of year forecast shows a 0.5% decrease year-over-year for Q4). 

"September did not bring the typical seasonal lift in the number of homes trading hands in this country, a clear indication that our housing market continues to adjust to higher borrowing costs," said Phil Soper, president and CEO of Royal LePage. "Home prices follow sales volume trends, which means we will see further softening in the final months of the year."

Of the report's 62 regions, only four markets posted a quarterly aggregate home price increase in the third quarter (St. John's, Charlottetown, Montreal South Shore, Saskatoon).

Above pre-pandemic

However, prices remain well above pre-pandemic levels; Canada's national aggregate home price increased 25.4% in Q3 over the same quarter in 2020, and 21.5% over the same quarter in 2019.

“With demand and supply falling in tandem, there is limited downward pressure on prices. Canadian home values should end the year well above pre-pandemic levels, retaining much of the gains made during the real estate boom of 2020 and 2021," said Soper.